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DoD Backs Changes to Law Protecting Former Military Spouses

WASHINGTON, July 11, 2002  DoD has sent a report to Congress with several recommended amendments to the controversial Uniformed Services Former Spouses' Protection Act.

Veterans and former-spouse advocacy groups have battled for years over the 1982 law. As part of the fiscal 1998 defense authorization act, Congress directed DoD to study the issue and make recommendations.

In the week before Sept. 11, 2001, DoD reported its findings and recommendations to Congress. "To date, Congress has not included any of these recommendations in pending legislation," said Army Lt. Col. Tom Emswiler, a military attorney in the Pentagon and one of the report authors. Congress also hasn't scheduled hearings on any of the issues addressed in the report, he added.

One major change that veterans groups have sought is for divorce courts to compute payments to the former spouse based on the date of separation or divorce rather than retirement. DoD felt the proposal had merit and recommended Congress amend the law appropriately, Emswiler said.

Currently, he explained, if an officer divorces as a captain with 10 years of service and then goes on to make colonel and retires with 25 years of service, the ex-spouse would be awarded a percentage of the officer's retired pay at career's end. The ex-spouse benefits from the officer's successful post-divorce career.

"That is inconsistent with the way state courts divide other assets," Emswiler said. "They typically draw a line at the time the parties separate or divorce depending on the state laws. In this case, we thought it not appropriate that the ex-spouse would benefit from promotions received after divorce."

Another DoD change would end the so-called 10/10/10 rule that governs when the Defense Finance and Accounting Service pays former spouses their portion of retired pay directly. Direct payments are allowed if the member served at least 10 years, the marriage lasted at least 10 years, and 10 years of the marriage coincided with the member's service on active duty.

The DoD report recommends former spouses receive direct payments from DFAS whenever they're awarded any portion of retired pay. Among other things, Emswiler said, ending the rule would help ensure that income tax reporting is done correctly.

Common misconceptions among military folks are that the 10/10/10 rule determines whether a former spouse is entitled to a share of retired pay and the formula courts use to compute that share. Not so, he said, adding the rule only determines who makes the divvy -- DFAS or the retiree.

The report proposed changes to the Survivor Benefit Plan as well. Military members at retirement can elect to pay for SBP coverage every month and, upon their death, their beneficiary would continue receiving a percentage of the deceased member's retired pay.

Under current law, members can elect the SBP for only one spouse, current or former. A clause in many divorces requires military members to elect the SBP on their former spouse's behalf upon retirement. The first former spouse who obtains such a clause in a settlement freezes out any subsequent spouse and family the member might have.

Emswiler said the DoD report team researched SBP and decided current practice is unfair to the member and subsequent spouses.

"You might have a former spouse who was awarded 10 percent of the member's retired pay, yet when the member dies that former spouse will receive 100 percent of the member's SBP," he said. "Members remarry also, so we thought it was appropriate that SBP benefits should be divisible among multiple spouses."

He said the report recommends that SBP benefits be assigned based on the share of retired pay former spouses receive. "There ought to be a presumption that the former spouses' share of SBP payments is consistent with the share of retired pay they receive," Emswiler said.

Another proposed change would make it easier for former spouses to ensure the retired members are paying SBP premiums as ordered. Under current law, a judge can order the member to pay SBP premiums for a former spouse upon retirement, but the former spouse is out in the cold if the member doesn't.

A little-known rule in the current law gives former spouses one year from the date of divorce to file the court order with DFAS. After that year, former spouses' only recourse is to go back to court if they didn't file and the retiree defaults on SBP premiums.

The DoD report to Congress recommends doing away with the one-year filing requirement. The team felt the former spouse should be able to inform DFAS at any time if the retired member is required to be paying SBP premiums.

The DoD report recommended no changes on two issues -- retired pay sharing when a former spouse remarries and the division of disability payments from the Department of Veterans Affairs.

Currently, the law says nothing about ending the sharing of retired pay with former spouses who remarry. Emswiler said the report recommends no change because the law allows courts to award the share of retired pay as property, not as alimony or support payments. Typically, no one returns property they've been awarded just because they remarry, he noted.

"We did not think it appropriate to put some sort of restriction in the act that says payments stop if the former spouse remarries," he said.

The DoD report did not make a recommendation on the division of VA disability payments, Emswiler said. Former spouses want the law changed to give them a portion of such payments.

Under current law, he explained, military members awarded VA disability payments forfeit an equal amount from their retired pay. The member benefits because disability payments are tax-free.

However, members awarded 100 percent disability forfeit all their retired pay. Former spouses awarded a share of retired pay would receive a share of zero. Military members argue that disability payments are for medical issues they shoulder alone, and so ex-spouses aren't entitled to share.

"We decided that's a matter that should be settled between VA and Congress," Emswiler said. "We said it isn't appropriate for DoD to get involved in how VA disability compensation should be handled."

He said legislation is pending in both houses of Congress that would allow for at least partial concurrent receipt of VA disability and military retired pay. If the legislation were to pass, he said, members would still be entitled to retired pay to divide with former spouses regardless of VA disability. This point of contention in the Former Spouses' Protection Act would go away, he added.

Emswiler stressed DoD committee members consulted state bar associations, military attorneys, and veterans and former spouse associations before they submitted their report and recommendations to Congress.

"We really did the best job that we could to solicit the input from people who were affected by this to make sure we identified all the issues and were aware of their points of view," he said. "What we really hope we came up with is a report that's fair and balanced. We went into this with an open mind."